A High Court judge has directed that ACC Bank is to be paid some €1.9 million from monies realised from the sale of Glenlion House in Howth, the intended family home of solicitor Michael Lynn and his wife Brid Muprhy.
Mr Justice Peter Kelly directed the payment out of the sum to ACC which, under a settlement last month of proceedings against Ms Murphy, will ultimately receive some €4.2 million, the bulk of the €4.7 million proceeds of sale of the house.
Ms Murphy is claiming entitlement to the remaining proceeds of over €400,000, but Bank of Scotland Ireland (BSOI) disputes that.
Counsel for BOSI expressed concern that the manner in which the ACC/Murphy settlement was constructed may have excessively diluted the sum available to it from the proceeds of sale. Counsel also accepted that ACC's claim ranked above BOSI's claim.
Gary McCarthy, for Ms Muprhy, said BOSI had chosen not to participate in the court proceedings involving Ms Murphy and ACC and were not entitled to shoehorn in a claim at this point.
During today's proceedings, there were heated exchanges between Caroline Costello, for BOSI, and Mr McCarthy as to the nature and effect of what was said during the ACC/Murphy proceedings. Mr Justice Kelly said it was not for him to determine the claims by the sides.
He noted Ms Murphy and BOSI will enter mediation talks later this month related to what is to happen to some €400,000 left from proceeds of sale. If those talks are unsuccessful, the judge directed that the High Court will then decide whether BOSI can make those claims in light of the settlement.
ACC has been accepted to have a prior claim arising from a €3.8 million mortgage granted by it for the purchase of Glenlion House and is to get more than €4.2 million of the proceeds of the Glenlion sale, leaving Ms Murphy and BOSI to fight over the remainder.
At one point, Ms Murphy was facing claims for some €11 million over three separate loans for the purchase of Glenlion House obtained from ACC, BOSI and Irish Nationwide Building Society in early 2007. Each bank had loaned sums of around €3.8 million.
Various legal actions have succeeded in greatly reducing that potential liability and INBS has withdrawn its claim.
The house was bought for €5.5 million but sold at auction earlier this year to meet some of Mr Lynn's estimated €80 million liabilities.
Ms Murphy, who was earning €46,000 a year as a nurse when she met Mr Lynn in 2004 and who gave up work in early 2006, claimed her husband conducted all financial dealings for the house, her signature was forged on certain loan documents and she was aware only of the loan from Bank of Scotland Ireland.
She also claims any liability by her to BOSI was limited to any monies which might be secured by her in the proceedings with ACC Bank because of alleged negligence by BOSI in not carrying out proper checks before loaning money to her husband.
The settlement of her case relating to ACC Bank means that the €3.78 million loaned by ACC for the purchase of Glenlion is to be paid to ACC from the €4.7 million net proceeds of the sale of Glenlion.
That deduction left a surplus of some €900,000 to be halved between Mr Lynn and Ms Murphy given the 50 per cent interest held by each in Glenlion.
ACC has accepted Ms Murphy could have half of that sum but that in turn is subject to Bank of Scotland’s claims. ACC claimed entitlement to Mr Lynn’s half of the €900,000 sum on the basis of other loans made to him by ACC and has secured a declaration it was entitled to that.
